spinoffs
A spinoff takes place when a company decides to get rid of a portion of its asset base, possibly because it wants to focus its activities elsewhere, but is unable to sell the assets for a price that it feels reflects their value. Instead, the parent company sets the assets up as a separate company, then hands out shares in that publicly listed firm to its current investors.
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Most stocks have dropped in the current market downturn, but we feel top-quality shares will be among the first to rebound. However, some, including Nissan, have severe problems in their markets that will likely block recovery anytime soon. Others, like Luckin Coffee, have big internal issues that limit their growth prospects ahead....
Alimentation Couche-Tard has rewarded our subscribers with big gains over the years. We first recommended it in our December 2008 issue at $15.50. Since then, the stock has split 3-for-1 and 2-for-1. That takes our cost down to $2.58 a share—which gives you a scintillating 1,363.6% gain!
The stock has dropped recently from the all-time high of $46.10 it hit in February of 2020....
The stock has dropped recently from the all-time high of $46.10 it hit in February of 2020....
Amazon.com has now jumped to a new all-time high for our subscribers, including a 42% bounce from the bottom it reached during the recent downturn.
Investors now realize, more than ever, that the company’s dominance in e-commerce—through its aggressive retail strategies, massive distribution power and strong Prime program—will continue to build momentum in the wake of the coronavirus.
Furthermore, it continues to solidify its dominance in the cloud through its Amazon Web Services unit; its investment in Alexa virtual assistant AI technology further sets it up for a major role in the use of voice interfaces by individual consumers but also e-commerce retailers.
AMAZON.COM INC....
Investors now realize, more than ever, that the company’s dominance in e-commerce—through its aggressive retail strategies, massive distribution power and strong Prime program—will continue to build momentum in the wake of the coronavirus.
Furthermore, it continues to solidify its dominance in the cloud through its Amazon Web Services unit; its investment in Alexa virtual assistant AI technology further sets it up for a major role in the use of voice interfaces by individual consumers but also e-commerce retailers.
AMAZON.COM INC....
Thermo Fisher’s shares have bounced back from their drop during the March market meltdown. They’re now up 22.1% over the last year.
The fundamentals that made Thermo Fisher a good investment before the COVID-19 downturn remain. And now, the company has just received FDA approval for its coronavirus test....
The fundamentals that made Thermo Fisher a good investment before the COVID-19 downturn remain. And now, the company has just received FDA approval for its coronavirus test....
HP INC. $15 is a hold. The company (New York symbol HPQ; Manufacturing sector; Shares outstanding: 1.4 billion; Market cap: $21.0 billion; Dividend yield 4.5%; Takeover Target Rating: Medium; www.hp.com) took its current form on November 1, 2015, when the old Hewlett-Packard Co....
Foodmaker Post Holdings recently initiated a “carve-out,” using an IPO to sell a portion of its active nutrition business, BellRing Brands. That now pure-play firm makes protein bars, shakes and nutritional supplements.
Post used the proceeds from the sale to pay down its debt and strengthen value for investors....
Post used the proceeds from the sale to pay down its debt and strengthen value for investors....
The stock market turmoil caused by COVID-19 will likely prompt many companies to postpone their upcoming spinoffs or strategic sales. Even so, when business conditions improve, we expect Vonage and Archer Daniels to follow through with their own plans to add investor value.
VONAGE HOLDINGS CORP....
VONAGE HOLDINGS CORP....
SONY CORP. ADRs $62 is still a hold. The Japanese conglomerate (New York symbol SNE; Manufacturing sector; ADRs outstanding: 1.3 billion; Market cap: $80.6 billion; Dividend yield: 0.6%; Takeover Target Rating: Lowest; www.sony.net) has created a new subsidiary called Sony Electronics Corporation to hold three of its businesses—Imaging Products and Solutions, Home Entertainment and Voice, and Mobile Communication.
The reorganization seems to be in response to reports that activist investor Daniel Loeb is taking advantage of Sony’s weaker stock price during the COVID-19 outbreak to increase his stake in the company.
At last report, he held about 2% of Sony, and still wants the company to separate its entertainment businesses (including Columbia Studios and Sony Music) from its electronic-manufacturing operations....
The reorganization seems to be in response to reports that activist investor Daniel Loeb is taking advantage of Sony’s weaker stock price during the COVID-19 outbreak to increase his stake in the company.
At last report, he held about 2% of Sony, and still wants the company to separate its entertainment businesses (including Columbia Studios and Sony Music) from its electronic-manufacturing operations....
Sharp share-price drops due to the coronavirus outbreak will likely encourage activist investors to raise their stake in—and influence on—these three firms (including Sony—see box). However, for reasons outlined below, we advise you to stay on the sidelines, at least for now.
OCCIDENTAL PETROLEUM CORP....
OCCIDENTAL PETROLEUM CORP....
We first recommended Leidos to you as buy in our December 2017 issue at $62; your shares then rose to $125 in February 2020 before the coronavirus outbreak pulled down the market. Even so, Leidos is still up an impressive 50% since our initial 2017 recommendation.
Your long-term prospects with this stock remain strong....
Your long-term prospects with this stock remain strong....